ADX XAUUSD Technical Analysis and ADX XAUUSD Signals

Developed by J. Welles Wilder

This a momentum indicator used to determine the strength of a xauusd price trend; it is derived from the DMI - Directional Movement Index which has two lines.

+DI - Positive Directional Movement Index

–DI - Negative Directional Movement Index

ADX is calculated by subtracting these two values and applying a smoothing function.

The ADX is not a directional indicator but a measure of the strength of the xauusd trend which has a scale of Zero to 100.

The higher the indicator value the stronger the trend.

A value of below 20 indicates that the xauusd market is not trending but moving in a range.

A value of above 20 confirms a buy or sell xauusd signal and indicates a new xauusd trend is emerging.

Values above 30 signifies a strong trending market.

When ADX turns down from above 30, it signifies that the current xauusd trend is losing momentum.

ADX combined with DMI

Since the ADX alone is a directionless indicator it is combined with the DMI index to determine the direction of the xauusd.

DMI

ADX and DMI Index

When the ADX is combined with DMI index a xauusd trader can determine the direction of the xauusd trend and then use the this indicator to determine the momentum of the prevailing xauusd trend direction.

XAUUSD Technical Analysis and Generating XAUUSD Signals

Buy XAUUSD Signal

A buy xauusd signal is generated when the +DI is above –DI, and the ADX is above 20

The Exit signal is generated when the indicator turns down from above 30.

Buy XAUUSD Signal

Sell XAUUSD Signal

A short signal is generated when the –DI is above +DI, and the ADX is above 20

The Exit signal is generated when the indicator turns down from above 30.

Sell XAUUSD Signal